The Sioux Falls Development Foundation sat on $91,000 of its city subsidy last year, and Sioux Falls still came out #1 in WalletHub’s ranking of the Best Large Cities to Start a Business:
WalletHub looked at the 150 largest cities in the U.S.—by Wikipedia’s data, Sioux Falls just makes that cut at 147. We thus don’t get to compare Sioux Falls with in-state rivals. But the only other city in a neighboring state to make the top 10 is Lincoln, Nebraska:
|Overall Rank||City||Total Score||Business EnvironmentRank||Access to Resources Rank||Costs Rank|
|1||Sioux Falls, SD||52.65||9||55||12|
|2||Grand Rapids, MI||52.52||16||43||13|
|3||Oklahoma City, OK||52.22||7||81||18|
|5||St. Louis, MO||51.81||55||11||7|
|6||Salt Lake City, UT||51.07||98||3||26|
Regionally, Omaha ranks 19th, Minneapolis 40th, Des Moines 60th, and St. Paul 105th.
WalletHub weighs these 16 metrics in its scoring for new-business suitability:
Business Environment – Total Points: 50
- Length of Average Work Week: Full Weight (~8.33 Points)
- Average Growth of Number of Small Businesses: Full Weight (~8.33 Points)
- Number of Startups per 100,000 Residents: Full Weight (~8.33 Points)
- Average Growth of Business Revenues: Full Weight (~8.33 Points)
- Five-Year Business-Survival Rate: Full* Weight (~8.33 Points)
- Industry Variety: Full Weight (~8.33 Points)
Access to Resources – Total Points: 25
- Financing Accessibility: Full Weight (~4.17 Points)
Note: This metric was calculated by dividing the “total annual value of small-business loans” by the “total number of small businesses.”
- Venture Investment (amount) per Capita: Full Weight (~4.17 Points)
- Prevalence of Investors: Full Weight (~4.17 Points)
- Human-Capital Availability: Full Weight (~4.17 Points)
Note: This metric was calculated by subtracting the “unemployment rate” by the “number of job openings per number of population in labor force.”
- Higher Education Assets (Average University Score & Number of Students Enrolled per Capita): Full Weight (~4.17 Points)
- College-Educated Workforce: Full Weight (~4.17 Points)
Note: This metric measures the percentage of the population holding at least a bachelor’s degree.
Costs – Total Points: 25
- Office-Space Affordability: Full Weight (~6.25 Points)
Note: This metric measures the per-square-foot cost of commercial office space.
- Labor Costs: Full Weight (~6.25 Points)
Note: This metric measures the median annual income of the city.
- Corporate Taxes: Full* Weight (~6.25 Points)
- Cost of Living: Full Weight (~6.25 Points) [John S. Kiernan, “2016’s Best Large Cities to Start a Business,” WalletHub, downloaded 2016.05.05]
Note that labor costs are part of the calculation. Cheaper labor means a better ranking… meaning a low-wage city like Sioux Falls where nearly half the kids qualify for free or reduced-price school lunches is a great place for the entrepreneurial class to launch its dreams.